Will 2012 be the year of “come together” consolidation for Islamic banks?

Size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, used as defensive measure to ward off unwanted suitors, and so on.

Islamic banks are very much like Islamic (equity) funds. There are hundreds of Islamic banks and funds, but the paid-up capital and assets under management, respectively, is too small to be meaningful. Yet, both, more so Islamic banks, present a unique situation (of an industry risk) of “too small to fail”.

Read More

By Rushdi Siddiqui, Global Head of Islamic Finance at Thomson Reuters

The time has arrived to take a deeper dive on better understanding of Shariah compliant companies in an Islamic (or Shariah compliant) equity indexes. To many informed and uninformed observers of Islamic equity investing, it seems to imply investing in publicly listed companies in Muslim countries.

The end results contradict the assumptions. This also rebuts the often heard allegations by many from the anti-Shariah movement that Islamic investing is about investing in companies linked to terrorism or financing terrorism. The largest companies in the S&P Global BMI Shariah include ExxonMobil, IBM, Chevron, Nestle, Microsoft, etc.
Read More

By Rushdi Siddiqui, Global Head of Islamic Finance, Thomson Reuters

‘Don’t cheat the world of your contribution. Give it what you’ve got.’ - Steven Pressfield

On November 22, 2011, the world’s first Islamic interbank benchmark rate (IIBR) was launched. It is the result of a collaborative approach taken by many Islamic financial institution, industry associations, and Shariah scholars, over the course of 24 months, to a decades-old industry challenge: how to decouple Islamic finance from a conventional Western pricing benchmark (LIBOR) and the law of necessity when an ‘Islamic’ alternative was not available. The objective was to support and preserve Islamic finance authenticity.
Read More

Continuous effort - not strength or intelligence - is the key to unlocking our potential. - Winston Churchill

How many Malaysian Islamic bankers work in senior positions at Islamic financial institutions in the GCC (Gulf Cooperation Council), Pakistan and the UK? Conversely, how many non-Malaysians work in senior positions at Malaysian Islamic financial institutions?

Does the training and experience in Malaysia for Islamic finance somehow imply that it’s too Malaysia-centric (Shafi school) for GCC (Hanbali, Hanafi, Jafri schools) Islamic financial institutions? Does it somehow imply that there needs to be a “retraining” of Malaysian Islamic bankers to the GCC “way” of Islamic banking, finance and takaful?
Read More

By Rushdi Siddiqui, Global Head Of Islamic Finance, Thomson Reuters

On the long plane ride back from Malaysia to New York, I was thinking about ‘out-side-the box’ areas that would interest me to develop in Islamic finance. There were two areas that would not exit my thoughts.

Is Islamic finance capturing the imagination of the Generation Y and Z (the youth) as employees and customers? What has Islamic finance financed to build?
Read More

“Angel investors don’t come with a halo and wings, but they can seem heaven-sent to an entrepreneur struggling to find financing.” - Cathie Gandel.

By Rushdi Siddiqui, Global Head Of Islamic Finance, Thomson Reuters

Malaysia has raised the profile of Islamic finance, Takaful and Halal industry, and, now, she must do the same to venture capital (VC). VC is an important emerging asset class that should contribute to government’s objective of building a knowledge based economy by 2020.
Read More

By Rushdi Siddiqui, Head of Islamic Finance, Thomson Reuters

KARL Kraus said: “Corruption is worse than prostitution. The latter might endanger the morals of an individual, the former invariably endangers the morals of the entire country.”

I was recently asked to give a speech on political freedom and corruption in Muslim countries. Both areas have a direct impact on capital flight and market formation, brain drain and economic development, portfolio investors and direct investments, including Islamic finance. I wanted to use the example of a secular and tolerant Muslim country, like Malaysia, that allows for a robust dialogue relative to many of its sister countries. Additionally, secondary market data already exist from established sources outside of Malaysia.
Read More

At the Joint High Level Conference on Islamic Finance in Jakarta, Indonesia, co- organized by Bank Negara Malaysia and Bank Indonesia, the question I wanted to address was:

Does Islamic Finance have A.I.R. (Authenticity, Innovation & Reach) or is it just hot air?
Read More